So today I'm going to talk about the need for investment; why should you invest and not just save. When we save, we get an average return of 7-8%. Considering the inflation, raise in income expenditures, this interest amount apparently reduces to 2-3%. While if you are investing your money, the average return can be anything between 10-100% depending upon the kind of investments you have made, hence increasing your interest amount manifolds.
Investments are extremely important for the following reasons:
- Inflation and cost of living are going to increase, no matter what. So to fight that, one needs to invest.
- To meet any kind of luxurious needs like a car, home, vacations.
- To have a safe retirement.
The next big question is, where to invest?
When it comes to investments, it is very important to diversify your portfolio. You can't invest all your money in a single place. because it is very risky. If at all the investment fails, your entire money is gone. But if you invest your money at different places and one or two of them fail, you will still have a lot of your money with you.
You can invest your money in the following:
- Government-backed financial institutions in the form of fixed deposits, recurring deposits, and bonds.
- Real Estate - The house you live in is never an investment but when you buy some property that you can let out and give you rental income, it becomes a great asset.
- Stocks and Mutual funds - When invested with proper fundamental and technical analysis, this can yield great interest.
- Cryptocurrency - I don't think I need to talk anything further about it here.
While there are various places you can invest your money, it is important to understand that investments are backed by huge risks. But the higher the risks, the higher the interests. If you play safe, you might not lose your principal amount but the interests would also not be that high.
Also, one should start investments right from the day they start earning. The 20s are the best time to start your investments. If you missed that train, you should start no later than your 30s.
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Thanks for sharing this,only the wise invest for the future some of us that are in money now enjoy that through the investment of our parent let assume their haven't taken any stems....Early investments lead to compounding returns. The time value of money increases over a period of time. Regular investments made right from an early age can reap huge benefits at the time of retirement. ... Because of early investments, you can afford things which others might not, at that age.